Another area to think about is who you will name as “fiduciaries” or “people with responsibilities” in your plan. Husband and wives are usually each other’s initial fiduciary, acting on each other’s behalf, should something happen. However, you will also have to have backups / successors for each respective position in your plans.

The responsibilities of a fiduciary in an estate plan are generally quite involved. In appointing a personal representative or a trustee, you should evaluate if your candidate’s personality and lifestyle fit with the duties and responsibilities of being a fiduciary. Specifically, you should consider:

-Is the person detail oriented and organized?

-Will their career or lifestyle afford them the time to devote to the responsibilities of being a fiduciary?

-Can they be sensitive and unbiased when decisions must be made?

-Does the person have the investment expertise to manage the trust assets?

The Personal Representative (“PR”) is a fiduciary of the Estate whose main duty is to carry out the wishes and terms of the decedent’s will. The PR has many legal responsibilities in their work as a fiduciary. They include (not an exhaustive list):

-Gathering all of the property owned by the decedent.

-Gathering and paying all just legal debts of the decedent.

-Paying any taxes owed (if applicable).

-Managing the Estate's Assets.

The other “Fiduciaries” to name are health care agents for your health care directive and also financial agents for your financial power of attorney. These are documents that are applicable in life, if you are unable to make your own decisions on health and financial concerns. The same list above should be considered.

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Disclaimer: The information contained in this publication provides a general overview on various topics and is strictly for informational purposes only. The reader should consult a qualified professional for advice based on his/her specific circumstances. AgCountry Farm Credit Services and the writer of this blog make no representations as to the accuracy or completeness of any information on this site or found by following any link on this site, and shall not be liable for any errors or omissions herein or for any losses or damages resulting from the display or use of this information.

Required Disclosure Pursuant to IRS Circular 230: Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code; or (2) promoting, marketing or recommending to another party any transaction or matter addressed in this communication.

Continuing with my discussion on estate planning, a general overview, another important component involves property ownership. The focus here revolves around estate tax planning. If you have a taxable estate and an attorney who is putting together an estate plan with estate tax planning tools, it is imperative that you address property ownership for you and your spouse.

The goal is to have your assets owned in a way to fully utilize each of your estate tax exemption amounts. Ideally, half of the assets should be in the husband’s name and half in the wife’s name, and controllable by your respective estate plans. "Controllable" means that at death, the decedents’ assets are controlled by their estate planning documents. If these are set up to transfer automatically, separate from the estate planning documents, the estate tax planning tools will likely not be available, even if they are set in your wills. Moreover, if you choose to use a revocable living trust as your estate planning vehicle, the trust must control the property in a proper manner (watch out for retirement accounts). This is true for everyone and must be worked through with professionals.

Bottom line: If the asset passes at death in a manner other than your estate planning documents, the estate tax planning tools will not be available, even if they are part of the plan.

Every asset is different, so it is important to talk with your estate planning professional to ensure that your assets are "owned" properly and will be controlled by your respective estate planning documents. Without this step in the process, your estate planning likely will not work as you intended.

Disclaimer: The information contained in this publication provides a general overview on various topics and is strictly for informational purposes only. The reader should consult a qualified professional for advice based on his/her specific circumstances. AgCountry Farm Credit Services and the writer of this blog make no representations as to the accuracy or completeness of any information on this site or found by following any link on this site, and shall not be liable for any errors or omissions herein or for any losses or damages resulting from the display or use of this information.

Required Disclosure Pursuant to IRS Circular 230: Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code; or (2) promoting, marketing or recommending to another party any transaction or matter addressed in this communication.

Regardless of the form you select (either last will and testament or revocable living trust), there are some components that will be necessary as a part of your planning. Usually, husband and wives create "mirroring" documents, in that they will work together, depending on who passes first and what happens based on that. Think of the documents working on levels: what happens at first death, and what happens at second death.

First Death

The primary focus at first death is to ensure two things:

1)that the surviving spouse has access to the income from the trust property; and

2)that there are available federal estate tax protection vehicles ready to be used.

*THERE MAY BE STATE ESTATE TAX LAWS TO TAKE INTO CONSIDERATION AS WELL. IT IS VERY IMPORTANT TO DISCUSS THIS WITH YOUR QUALIFIED ATTORNEY.

Second Death

The primary focus at second death is to figure out how you would like your assets to pass to your heirs. This is unique to every family. So, your work in planning will involve how to complete the construction of your final distribution of assets to your children. A "fair and equitable" distribution of assets is very important to consider here, especially with farming and non-farming children. Your planning will also involve consideration of what happens should one of your children have an untimely death and pre-decease you and you are unable to revise your documentation. This is not something anyone wants to think about; however, it is important to have a complete plan in place.

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Disclaimer: This publication provides a general overview of various topics and is strictly for informational purposes only. The reader should consult a qualified professional for advice based on his or her specific circumstances. AgCountry Farm Credit Services and the writer of this blog make no representations as to the accuracy or completeness of any information on this site or found by following any link on this site, and shall not be liable for any errors or omissions herein or for any losses or damages resulting from the display or use of this information.

Required Disclosure Pursuant to IRS Circular 230: Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code; or (2) promoting, marketing or recommending to another party any transaction or matter addressed in this communication.